NRA’s Performance Index Edged Down In September, But Cap Ex Indicators Rose

A pronounced slowdown in restaurant operator traffic and sales in September pulled down the Restaurant Performance Index maintained by the National Restaurant Association. On the other hand, operators are a bit more optimistic about the short-term future. The overall index fell 0.3 point to 100.3, but remained above the 100 tipping point the separates expansion from contraction. The index has been in expansion mode for 11 straight months.

In spite of the sales and traffic slowdown, operators boosted capital spending in the month. The component measuring operators which made a capital expenditure in the past six months jumped 1.5 points to 99.7 as 49% of operators made such a buy, up from 41% in the August. The measure for those that plan a purchase in the next six month also rose slightly to 98.9, up 0.1 point, with 44% planning a capital buy.

The Current Situation Index was down 0.7 point and fell to 99.9 in September as same-store sales and customer traffic components fell sharply. The same-store sales measure plummeted 2.3 points while that for traffic was off 1.8 points. The labor measure was off 0.2 point.

Three of the four components of the Expectations Index rose. The indicator for same-store sales in the next six months jumped 0.6 point and that for future staffing inched up 0.2 point. Only the measure for future business conditions fell, off 0.1 point.

The RPI in the third quarter showed consistent softening from earlier in the year, but somehow managed to remain in expansion territory. Consumer confidence rose during the period and retail sales for many nondurables, including eating and drinking places, also rose.